Commercial Finance Law and New York’s Truth in Lending Act
In July 2020, the State of New York passed the Truth in Lending Act, designed to improve transparency in borrowing costs. The bill requires clearer language from lenders so that businesses can more easily compare financing offers. According to the Responsible Business Lending Coalition, the bill requires all lenders to disclose annual percentage rate and repayment terms for loans. This law has important ramifications for lenders and has triggered further changes to State law regarding commercial finance.
In December 2020, for example, New York governor Andrew Cuomo signed into law commercial finance legislation that mirrors the Truth in Lending Act’s disclosure requirements. Set to take effect June of 2021, the law requires disclosures of APR, payment amounts and fees, and terms of repayment for transactions of $500,000 or less. The law will provide for a penalty of up to $2,000 for each individual violation and up to $10,000 if the provider is found to have willfully violated the law.
The Truth in Lending Act and other recent disclosure laws further complicate the already treacherous landscape of local and national laws lending institutions must navigate. Compliance with these laws is essential to avoiding lawsuits. Bleakley Platt & Schmidt represents both foreign and domestic banks and financial institutions, agency lenders, municipalities and borrowers. Our expertise is available for any group that seeks clarity in lending law requirements.
Our firm has decades of experience and market knowledge that allow us to offer sophisticated and cost-effective counsel in commercial financing transactions. Some of our areas of expertise include secured or unsecured financial lending, commercial loan restructuring, lender liability litigation, and more. Read more about our commercial finance offerings here. Call Bleakley, Platt & Schmidt’s Commercial Finance Practice Group today at 914-287-6102.